Taxation of Chargeable Gains Act 1992 Schedule 4C paragraph 12

Attribution of gains to settlor in section 1M cases

Schedule 4C paragraph 12 deals with what happens when a settlor who has been temporarily non-resident returns to the UK, and chargeable gains from a non-resident settlement have not been fully recovered from beneficiaries — in which case the remaining gains may be attributed back to the settlor, subject to certain limits.

• When a temporarily non-resident settlor returns to the UK, gains that accrued to settlement trustees during the non-residence period may be treated as accruing to the settlor in the period of return under section 1M.
• The gains attributed to the settlor are capped at the amount remaining in the Schedule 4C pool for the relevant tax year after gains have already been matched to beneficiaries under paragraph 8 — specifically, the section 1(3) amount (chargeable gains after deducting allowable losses).
• Where the settlement holds property that did not originate from the settlor, only the portion of any capital payment reasonably attributable to property originating from the settlor is taken into account when calculating the amount already charged to beneficiaries.
• The concept of property "originating from the settlor" is interpreted in accordance with paragraph 8 of Schedule 5, and all terms used in this paragraph carry the same meaning as in section 1M.